00:00Well today as expected the Independent Reserve Bank increased interest rates by
00:04a quarter of a percentage point. Australians are under pressure already
00:08and we know that this will make things harder for people. The fact that
00:13inflation and interest rates are going up right around the world doesn't take
00:17the sting out of this for Australians who are already doing it tough. The
00:22Reserve Bank statement makes it really clear that we have an inflation
00:26challenge in our economy which is made worse by the war in the Middle East.
00:30Now the statement makes it abundantly clear that one of the main drivers of
00:35inflation in our economy is a conflict on the other side of the world pushing up
00:40global oil prices and being felt right around our economy and indeed right
00:45around the world. The war in the Middle East is not the only factor when it
00:49comes to our inflation challenge but it is a very very big factor and the Reserve
00:54Bank statement makes that very clear. Australians are under pressure we know
00:59that and that's why we're providing cost-of-living help in the most
01:02responsible way that we can in the most responsible budget that we can at the
01:07same time as we address some of these longer term challenges in our economy like
01:11productivity. If you look at the reform package in the budget the productivity
01:16package in particular but also the budget repair in areas like the NDIS and more
01:22broadly. We take the inflation challenge in our economy very seriously. We take
01:27responsibility for our part of the fight against inflation. That's why we've
01:32been managing the budget responsibly. It's why we've been delivering a couple of
01:37surpluses and then much smaller deficits. It's why we've made sure that
01:41public demand in our economy has slowed rather than gathered pace. If you look at
01:47public demand in our economy versus private demand over the last year or so
01:51for every five dollars of demand in our economy four of those have been private
01:56demand one has been public demand and we saw public demand growth halve compared to
02:05the year before. So as I said we do have serious challenges in our economy our
02:11inflation challenge is being turbocharged by a war on the other side of the world.
02:17Australians are paying a very hefty price for that war in the Middle East and
02:21today that price became a bit steeper with this decision from the independent
02:27Reserve Bank. So we do take responsibility for our part of the fight
02:30against inflation. That's why we will continue to manage the budget in a
02:34responsible way. Roll out cost of living help in a responsible way and deal with
02:38these longer-term challenges as well. Now tomorrow we'll get the inflation
02:44figures for the month of August. Economists expect those figures to show
02:49that the big driver of inflation in the month of August has been the
02:55re-escalation of the war in the Middle East combined with the removal of the
03:02excise help and the timing of the energy rebates earlier on. So inflation
03:08remains a primary challenge in our economy. A big driver of that is the war in
03:12the Middle East. The Reserve Bank has made that clear today in releasing their
03:16statement explaining the reasons for their decision.
